Earnings Release

Earnings Release Q3 2015
Samsung Electronics
October 2015
Disclaimer
The financial information in this document are consolidated earnings results based on K-IFRS.
This document is provided for the convenience of investors only, before the external audit on our 3Q 2015
financial results is completed. The audit outcomes may cause some parts of this document to change.
This document contains "forward-looking statements" - that is, statements related to future, not past, events.
In this context, "forward-looking statements" often address our expected future business and financial
performance, and often contain words such as "expects”, "anticipates”, "intends”, "plans”, "believes”, "seeks”
or "will ". “Forward-looking statements" by their nature address matters that are, to different degrees, uncertain.
For us, particular uncertainties which could adversely or positively affect our future results include:
· The behavior of financial markets including fluctuations in exchange rates, interest rates and commodity
prices
· Strategic actions including dispositions and acquisitions
· Unanticipated dramatic developments in our major businesses including CE (Consumer Electronics),
IM (IT & Mobile communications), DS (Device Solutions)
· Numerous other matters at the national and international levels which could affect our future results
These uncertainties may cause our actual results to be materially different from those expressed in this document.
Income Statement
3Q ’15
% of sales
2Q ’15
% of sales
3Q ’14
51.68
100.0%
48.54
100.0%
47.45
31.61
61.2%
28.96
59.7%
30.71
Gross Profit
20.07
38.8%
19.58
40.3%
16.74
SG&A expenses
12.68
24.5%
12.68
26.1%
12.68
3.42
6.6%
3.34
6.9%
3.34
7.39
14.3%
6.90
14.2%
4.06
△0.08
△0.2%
0.50
1.0%
0.54
Equity method gain/loss
0.02
0.0%
0.03
0.1%
0.00
Finance income/expense
0.06
0.1%
0.19
0.4%
0.24
7.39
14.3%
7.63
15.7%
4.85
1.93
3.7%
1.88
3.9%
0.62
5.46
10.6%
5.75
11.9%
4.22
3Q ’15
2Q ’15
3Q ’14
13%
13%
11%
Profitability (Net profit/Sales)
0.11
0.12
0.09
Asset turnover (Sales/Asset)
0.87
0.84
0.85
Leverage (Asset/Equity)
1.37
1.35
1.42
24%
24%
18%
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Other non-operating income/expense
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
ROE
EBITDA Margin
3Q ’14
2Q ’15
24%
3Q ’15
24%
18%
13%
11%
ROE
13%
EBITDA Margin
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
3Q ’15
QoQ
2Q ’15
3Q ’14
51.68
6%↑
48.54
47.45
11.59
3%↑
11.20
11.60
6.97
5%↑
6.66
7.21
26.61
2%↑
26.06
24.58
25.94
2%↑
25.50
23.52
20.31
14%↑
17.87
16.29
12.82
14%↑
11.29
9.89
9.14
8%↑
8.49
7.93
7.49
13%↑
6.62
6.25
Operating Profit
3Q ’15
QoQ
2Q ’15
3Q ’14
7.39
0.50
6.90
4.06
CE
0.36
0.15
0.21
0.05
IM
2.40
△0.36
2.76
1.75
DS
4.65
0.79
3.87
2.33
Semiconductor
3.66
0.26
3.40
2.26
DP
0.93
0.38
0.54
0.06
(Unit: KRW Trillion)
Total
Note) CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Sales for each business unit includes intersegment sales.
2
Q3 Results and Outlook by Business Units
Semiconductor
DP
[Q3 Results]
[Q3 Results]
□ Memory : Continued process migration and improved product mix
□ OLED: Earnings improved led by launch of new products,
- DRAM : Addressed solid demand for high value-added products
such as DDR4/LPDDR4; Expanded 20nm migration
- NAND : Increased high-density solution product (SSD/UFS) sales
□ S.LSI : Began to supply 14nm foundry products, while solid
demand for LSI continued under strong seasonality
- OLED shipments increased by high-30% QoQ
□ LCD: Despite slowdown in demand as well as decline in ASP,
shipment area increased due to trend toward larger size TV;
Solid profit driven by increased shipments of
· TV panel shipments:
□ Memory: Expand sales of high-density/solution products;
Continue cutting-edge process migration
previous years, server/mobile demand to remain solid
due to acceleration of DDR4/LPDDR4 penetration and
content increase; PC demand to improve QoQ
- NAND : Increase demand for high-density mobile and SSD;
Reinforce product competitiveness by 10nm-class
3rd
(units) increased by mid teen-digit % QoQ
(area) increased by low teen-digit % QoQ
- DRAM : While seasonal demand to slow down compared with
gen V-NAND
□ S.LSI: Expect earnings to improve driven by 14nm foundry
supply growth
low-end panel shipments and external customer base
TV panels such as UHD
[ Q4 Outlook]
migration and mass production of the
improved productivity, an increase in mid to
[ Q4 Outlook]
□ OLED : Focus on enhancing cost competitiveness and
expand external customer base by reinforcing
mid- to low-end line-ups
□ LCD : Plan to focus on cost reduction, inventory
management and expanding customer base
to address concerns in oversupply and ASP decline
due to a slowdown of set demand in emerging market
and LCD industry capacity expansion
3
Q3 Results and Outlook by Business Units
IM
CE
[Q3 Results]
[Q3 Results]
□ Mobile: Strong shipment growth QoQ led by the launch of new models; □ TV : Market demand increased QoQ under strong seasonality;
Earnings improved led by expanded sales of premium
Slight increase in revenue while profitability declined
due to S6 price adjustment and product mix change
- Smartphone: Strong shipment growth driven by new models,
including S6 Edge+, Note5, A8, J5;
Lower ASP due to increased sales in mid- to lowend products
- Tablet : Despite weak market demand, shipments and earnings
remained in line with the previous quarter
□ Network: Profit improved QoQ due to overseas carriers’ LTE
network expansion
products such as UHD/ultra-large sized TV
- Strong shipment growth mainly in developed markets,
including Europe
· LCD TV: North America QoQ 6%↑, Europe QoQ 14%↑
- Product-mix improved due to sales of high value-added UHD TV
· UHD TV: QoQ 23%↑ (Portion: 2Q 17% → 3Q 19%)
□ Digital Appliances : Solid demand growth in North America;
earnings improved QoQ led by strong sales of premium products
- Revenue share of premium products: 2Q 47% → 3Q 49%
[Q4 Outlook]
[Q4 Outlook]
□ Market: Expect smartphone and tablet demand to grow QoQ,
□ TV: Entering the year-end peak season, expect a significant
while competition to intensify under strong seasonality
□ SEC: Focus on maintaining solid earnings by expanding
shipments and by managing expenses efficiently
- Smartphone: Expand sales of new models released in Q3
- Tablet: Expect shipments to increase slightly due to strong
seasonal demand
demand increase in developed markets, but FX risks remain
in emerging markets
- Focus on premium product sales by seasonal promotion;
Improve earnings through efficient product operation including
profit-oriented line-up optimization
□ Digital appliances: Focus on increasing revenue by sales of
premium line-up and launching of new products (Add Wash, etc.)
4
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
Sep 30,
2015
Jun 30,
2015
Sep 30,
2014
129,778.4
115,789.7
119,811.3
- Cash ※
69,724.8
61,833.8
66,951.2
- A/R
27,631.5
25,578.1
24,069.5
- Inventories
22,841.1
19,311.2
18,872.7
9,581.0
9,066.6
9,917.9
116,789.2
115,901.2
111,935.2
- Investments
14,035.0
14,466.2
17,709.7
- PP&E
86,560.4
84,666.3
76,012.1
5,560.3
5,530.4
4,684.8
10,633.5
11,238.3
13,528.6
246,567.6
231,690.9
231,746.5
65,838.9
57,754.2
68,278.8
12,886.9
11,313.7
13,938.5
- Trade Accounts and N/P
9,842.9
6,766.9
9,483.4
- Other Accounts and N/P
& Accrued Expenses
18,745.2
17,710.9
17,747.1
- Income Tax Payables
1,712.2
1,750.6
3,943.6
- Unearned Revenue
& Other Advances
2,217.0
2,263.5
3,048.2
20,434.7
17,948.6
20,118.0
Shareholders' Equity
180,728.7
173,936.7
163,467.7
- Capital Stock
897.5
897.5
897.5
246,567.6
231,690.9
231,746.5
Current Assets
- Other Current Assets
Non Current Assets
- Intangible Assets
- Other Non Current Assets
Total Assets
Liabilities
- Debts
- Other Liabilities
Total Liabilities &
Shareholder's Equity
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Sep 30,
2015
Jun 30,
2015
Sep 30,
2014
Current ratio ※
245%
251%
225%
Liability/Equity
36%
33%
42%
7%
7%
9%
-31%
-29%
-32%
Debt/Equity
Net debt/Equity
※ Current ratio = Current assets/Current liabilities
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
3Q '15
※
2Q '15
3Q '14
Cash (Beginning of period)
61.83
56.13
60.66
Cash flows from operating activities
11.87
10.71
10.44
Net profit
5.46
5.75
4.22
Depreciation
5.10
4.95
4.33
Cash flows from investing activities
-5.84
-3.70
-3.90
-6.06
-6.29
-3.86
1.31
-1.67
-0.20
1.46
1.25
-0.12
7.89
5.71
6.29
69.72
61.83
66.95
Increase in tangible assets
Cash flows from financing activities
Increase in debts
Increase in cash
Cash (End of period)※
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
□ Current State of Net Cash (Net Cash =Cash ※ - Debts)
(Unit : KRW Trillion)
Net Cash
Sep 30,
2015
Jun 30,
2015
Sep 30,
2014
56.84
50.52
53.01
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities